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Audit & Assurance

The Year in Review: A Look Back at Viewpoints from 2015

For the accountancy profession, 2015 was a forward-looking year. The need to attract and develop new talent, embrace rapidly changing technological trends, and demonstrate how the accountancy profession is playing a wider role in society were among the key themes we saw in our bi-weekly Viewpoint features. By and large, the profession is redefining itself in many different ways, and this was reflected in the views of our contributors, experts and leaders in their fields, who illustrated the message that change should be seen in light of the opportunities it presents. In this feature, we will take a look back at what we read on the front pages of the Gateway in 2015.

Attracting and Developing New Talent: A Workplace of Starkly Different Generations

In “Moving Forward, Together”IFAC® President Olivia Kirtley stresses the need for inclusion and diversity in the workplace, which is now indispensable as the accountancy profession becomes increasingly globalized. IFAC CEO Fayez Choudhury also stresses, in “The Importance of Winning the Beauty Contest,” that accounting firms must be cognizant of the idea that they must appeal to a new generation of young people with different skills, priorities, motivations, values, and approaches to work.

Society and Environment: Accountants as Stewards of Greater Public Value

The skills and experience of accountants are needed everywhere in society. There are problems to be solved and vital resources to be managed. Harvard University School of Business Professor George Serafeim calls for better accounting practices in the public sector. In "The Value of Accounting: The Case of Greece,"he cautions that a lack of high-quality government financial information reduces accountability for decision making, distorts incentives, and leads to bad decision making in government. To demonstrate greater accountability to the public and global economy, IFAC’s Russell Guthrie calls for a more responsible system of international taxation in "Avoiding ‘Tax Chaos’ in the Globalized, Digital 21st Century."

Financial Reporting: Finding Common Ground, Seeking High Quality, and Shaping the Future

The accountancy profession understands the need for public input as a necessary and valuable aspect of the public interest. In this light, International Accounting Standards Board Chairman Hans Hoogervorst calls upon the profession to participate in considering the Conceptual Framework for International Financial Reporting Standards (IFRS) in “Help the IASB Shape the Future of Financial Reporting.” Reflecting on recent history in "What Have We Learned from the EU Experience of IFRS Reporting?", Institute of Chartered Accountants in England and Wales (ICAEW) Chief Executive Michael Izza says that the benefits of IFRS outweigh the costs, but we can still learn from jurisdictions that have recently adopted them.

Accountants have a variety of roles to play in the sound management of economic growth. In “Unlocking Global Growth,” David Thodey, Chair of the 2014 B-20 Infrastructure and Investment Taskforce, notes that International trade will also make increasing demands on investment and that the largest roadblock to increasing private infrastructure investment is the small number of properly assessed investment-ready projects.

Association of Chartered Certified Accountants Chief Executive Helen Brand says that accountants provide the necessary conditions for secure lending to happen. In "State of Business Financing: Hazards Ahead?" she notes that accountancy professionals will have an advantage in helping businesses raise finance for four very clear reasons. IFAC CEO Fayez Choudhury also discusses this in "Innovation in Financing SMEs: An Opportunity for SMPs," where he emphasizes the critical role that small- and medium-sized practices can play in assisting small- and medium-sized entities with securing capital. On the other side of the equation, ICAEW Chief Executive Michael Izza suggests that the accounting profession should develop a standard scope for an assurance report to allow different banks to obtain assurance on a consistent basis in "Reporting on Banks’ Regulatory Capital: A Role for Auditors?".

Although change can always seem daunting, we should never ignore the many opportunities it presents. How will the accountancy profession continue to find greater relevance in society? How will it adapt to changes in technology and public expectations? How will it continue to create new public, economic, and social value? These questions are every bit theoretical as they are practical.

On behalf of IFAC, thank you for helping us build the Gateway community in 2015. We invite you to share your views with us in 2016.

Eli R. Khazzam is a senior professional focused on economic development & emerging technologies. Previously, Mr. Khazzam was the Editor-in-Chief of the IFAC Global Knowledge Gateway and had various roles working as a Governance Manager and Senior Technical Manager of Public Policy and Regulation at IFAC. Prior to joining IFAC, he was an Executive Director at Liquid Metrics, LLC., a research and consulting firm specializing in community-based economic development and public policy issues.See more by Eli R. Khazzam

Join the Conversation

Ian JenkinsApril 8, 2016

Thank you for the invitation. The question of whether we can safely serve anyone beyond the government of the area where the audit is located seems key to the future of disciplined global finance, policed by the global profession.
Over the years there have been too many examples around the world of 'independent' audit apparently being compelled to assist governments at huge expense to the public, shareholders, and the global financial stability that the G20 political grouping says it seeks. Let alone the UN's requirements in 2015's sustainable development goals.
It was very constructive that IFAC advanced the issue last month by seeking assistance from the OECD. The president highlighted the need for strong collaboration and commitment from the private, public and regulatory communities.
It seems that we must await the OECD's preparedness to protect cross-border audit. Hopefully this will be soon, and then the matter can be addressed more widely.

Eli KhazzamApril 5, 2016

Dear Ms. Leung and Mr. Jenkins - thank you very much for your comments below. They are very helpful and much appreciated. Mr. Jenkins, you are very much on-point with the UN SDGs (we have begun in earnest to strengthen our relationship and relevance to these goals). You likely saw one of our recent Viewpoints which addressed the subject of SDGs.
Ms. Leung, thank you too. You include a range of very important and relevant futurist topics in your comment below. They are each critical. I invite you both to draft articles for the Gateway if you would like to address these areas with some thoughtful research and/or professional insights. We hope to do wider coverage of these areas this year.
Kindly,
Eli

Philomena LeungApril 5, 2016

Accounting is the foundation for developing and maintaining accountability through theories and systems of valuation and measurement, governance, reporting and assurance. The 2015 Year in Review highlight the important message, as the Editor-in-Chief refers 'the profession is redefining itself in many different ways...' The various contributions reflect the forward thinking of many readers and I would really like to see IFAC taking a leadership role in looking at a holistic way of 'redefining' not only the professional regime, but also accounting, its role in society, and the development and education of future professionals in the field. The re-defining means that we must understand that the tradition of accounting was very much developed through the industrial age. With the next generations, the changing technology and big data, the rise of community power, the shift in values and sustainability development, I see accounting itself must be redefined, along with re-shaping the way we develop future 'professionals' who address the challenges of an evolving business model that will be different from what we all have been used to.
I have listened to many futurists and I have engaged in conversations on this - believe me, I am not the only one thinking about this. We also have seen the changing landscape in the law profession. Accounting has to be redefined to remain relevant.
Professor Philomena Leung, Macquarie University, Sydney.

Ian JenkinsJanuary 11, 2016

What’s Ahead in 2016? Serving the public interest?
"The World Congress of Accountants is a wonderful opportunity for us as a profession to confirm that we are a global profession and that we serve the public interest globally", IFAC said a year or so ago at the quadrennial meeting in Italy. A few months ago, on this evolving theme, the United Nations launched sustainable development goals that set targets for the public interest; these included 'building effective, accountable institutions at all levels', with specific requirements for nations to develop effective, accountable and transparent institutions at all levels, and substantially reduce corruption and bribery in all their forms.
The profession can be caught between the political demands of individual nations and those of the United Nations. Which to serve? Perhaps we'll have to wait until 2018 - the next WCOA in Australia - for this vital matter to be addressed.

The new wave of modern slavery disclosure regulations require companies to disclose audits and associated monitoring mechanisms to tackle any human suffering arising from their business operations—a process accountants can play a play a role in.

by Stathis Gould, Head of Professional Accountants in Business and Integrated Reporting, IFAC | February 12, 2018

Financial modelling that enables an understanding of how a Product-as-a-Service model can be viable and represented by financial statements will help to unlock new investment in new innovative and sustainable business models.

by Patrick Kabuya, Senior Specialist, World Bank Group | February 2, 2018

Adopting integrated thinking and IR will contribute to improving decision making, transparency and accountability especially as to how organizations in the public and private sector are creating value and contributing towards improving lives of...

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